Jack's Journal (9/4)

^{Weekly Trivia}

Source: Investopedia

^{Marketplaces are kinda brutal (Part II)}

I think the coolest part about our business is that we bootstrapped our first $100,000 in revenue. Bootstrapped is startup jargon for we didn’t use investor dollars or line of credit to get going.

However, I did inject about $90,000 of my own money in 2022, and over some beers I’ll tell you how I made that money dissapear way too fast.

But per my last blog, today we’re diving into the supply side of our marketplace.

Marketplace Supply

In the early days of Habits, I legit spent my nights and weekends DM-ing financial advisors on LinkedIn.

This carried on for a solid 12-18 months, meanwhile both Veera (my co-founder) and I had full-time jobs. Candidly, 2022 and 2023 is a total blur.

Eventually we found the best 15-20ish financial advisors to start with who were super credible CFPs, CFAs, CPAs, etc. We charged a $750 refundable deposit. So at any point they could ask for their money back.

Low risk, high reward for them. Commitment and intent to proceed for us.

For the record, nobody asked for their money back :)

Growth Mode Activated

In 1Q24, we locked the f**k in.

This is when I began to build significant confidence in our business. We got about 100+ families to fill out a contact form and dozens of advisors were looking to join.

Don’t get me wrong it was a clunky mess of spreadsheets, DocuSign’s, notetaking, getting advisors to sign & pay, making e-introductions to families, creating urgency, communicating with compliance (it’s a highly regulated industry), and every tiny, little thing you can imagine.

And I’ll never forget that we got an immediate success story where an advisor acquired a new client within their first two weeks on the platform.

Price Discovery

So think about it…why should we charge our earliest adopters the same rate as the ones who joined later on?

Those early adopters took more risk. They believed in us first. They were there to test, give feedback, and engage with us early and often.

So we slowly started hiking up the annual subscription price.

And that ladies and gentleman is how we stumbled into the concept of “price discovery.” Meaning we began to experiment with our pricing.

It goes without saying, but you learn very quickly how much people want and or need your product once they gotta swipe their credit card.  

Managing A Pipeline

As the months of this year began to fly by, we began to recognize we need to get organized. And fast.

You’d be shocked how hectic your life becomes when the sales pick up. Imagine having 20 new firms requesting a demo per month (~$130k in ARR), large RIAs & enterprises shoving compliance & due diligence docs down your throat, joining ZOOM calls where it’s you and then 17 other people where 95% of them not showing their video, people saying their in and then no-showing come contract/payment time…

I can’t begin to explain how frustrating sales can be.

But sales solves a lot of problems.

Quick Learning Lessons

1. If someone wants to walk away, you gotta let them go. That means no begging or chasing.

2. If someone is giving you a really hard time, at some point you have to ask yourself “Is it really worth the money to deal with them?”

3. Give a discounted rate to early adopters. They deserve it.

4. The right price is where 20% of customers say no (strictly due to the cost).

5. Have a sales deck that addresses every possible question, comment, or remark that your customer may bring up (this should be updated on a quarterly basis).

Hope this gave some perspective. We’re not some sexy startup that raised millions out of the gate. Arguably we’re the complete opposite.

Stay tuned till next week where I’ll dive into what it’s like recruiting & working with a co-founder.

^{Find Your Financial Advisor}

If you’re somebody on the sidelines or are not sure if a financial advisor makes sense for you or your family, just shoot me an email at [email protected].

Or… visit our website and book time with us!

Thanks for reading, Habits fam. See you back here next week for more.

-JB